Montana finds the logic that is Medicaid; other states debate expansion

Apr 17, 2019

A report by the Montana Budget and Policy Center found that Medicaid expansion added $47 million to the Indian health system

The Montana Senate found the votes for the logic that is Medicaid and gave its final approval Tuesday. This renews a public health insurance program that has insured more than 15,495 Native Americans in the state and added significant resources to the Indian Health system.

Last week several legislators voted against renewing the state’s Medicaid program as a demand to gain support for the state supporting the coal industry. One of the holdouts was Sen. Duane Ankney who represents a district that has been hit by the shrinking market for coal and coal-generated electricity. He told MTN News that his goal had never been to kill Medicaid expansion. (The bill that would have invested state dollars in a coal plant failed in the House shortly after the Senate Medicaid vote.)

Across the country, Medicaid is often a partisan debate with Democrats supporting its expansion and Republicans arguing that the insurance program is too expensive. But Medicaid in Montana had bipartisan support, when eight Republican senators joined all 20 Democrats and voted yes. One reason for that was the impact of the program on rural health care. However Republicans also were successful adding a time limit to the bill -- the legislation will have to be reauthorized again in six years -- as well as work requirements.

This is a classic example of why it benefits Indian Country to have legislators in both politicial parties. Republican Sen. Jason Small, Northern Cheyenne, took the lead in championing the Medicaid expansion in the Senate.

The Medicaid expansion bill must now go back to the House for amendments, then be reconciled between the House and Senate, before moving to the governor for his approval. But that is considered likely.

Medicaid is a state-federal partnership that has become a significant source of revenue for the Indian Health system. The Affordable Care Act expanded the eligibility rules, opening up the program to more people. But each state decides whether to participate or not.

In federally-operated Indian Health Service clinics and hospitals Medicaid is the largest contributor to “third-party” billing for patient care, some $1.1 billion. That number, however, does not include Medicaid payments to tribal, urban, and non-profit Native health operations. One reason why third-party billing is so critical: By law the dollars are supposed to remain at the local unit.

Indian Country is not front and center in the Medicaid debate but is impacted across the country by decisions made by state legislatures. And any dollars spent by a state Medicaid program for the Indian health system gets a 100 percent reimbursement from the federal government. There are 37 states that have adopted Medicaid expansion under the Affordable Care Act and 14 states have not done so. A new governor in Wisconsin, Democrat Tony Evers, has proposed the expansion. One poll shows more than seven-out-of-ten citizens in favor of the plan, but Republican legislators say it’s too expensive.

Sam Ropa, writing for the The Badger Herald, makes the case for expansion in Wisconsin. “Healthcare disparities felt by Wisconsin Native American communities are still harsh reality … But at the state level, Medicaid expansion can begin to close health disparities between Native and non-Native people.”

Ropa said the governor’s budget proposal would be a start. “By accepting federal funds for Medicaid, the budget expands BadgerCare eligibility from 100 percent to 138 percent of the poverty line, setting 82,000 more adults up to gain coverage. Since 26.3 percent of Native people in Wisconsin live below or just above the federal poverty line, the expansion will give more of them access to quality healthcare.”

Medicaid and public education are the two programs that states spend the most tax dollars implementing. And it represents more than 21 percent of all state spending. So most citizens are in favor of the public health insurance, but most Republican legislators see it as an expensive welfare program.

Idaho voters, for example, voted to expand Medicaid in the last election but the legislature sought ways to limit that expansion, including adding significant work rules. The Idaho Legislature also wanted the insurance program to go through an insurance exchange with private plans instead of Medicaid. That idea will require a waiver from the federal government. But that expansion is on track. The state is working on rules and expects to enroll eligible participants in November with health insurance coverage beginning the first of the year.

Alaska Gov. Mike Dunleavy, a Republican,has proposed a similar private market reform in that state, moving much of the insurance network to private insurance. However Anchorage Democratic Rep. Ivy Spohnholz told Alaska Public Media that it’s too late in the session to consider the proposal. “We will not be able to get that done in the next 30 days and, therefore, this will be a longer-term process, which is to be expected if you’re talking about wide-ranging, sweeping systemic reforms,” she said.

Two states with large Native American populations that have not expanded Medicaid are Oklahoma and South Dakota.

At a recent meeting in Norman, state Democrats said Oklahoma could be eligible for as much as $1.3 to $1.4 billion from the federal partnership and the state’s match would be about $140 million.

“This year, if we can mobilize enough Oklahomans, if we can ensure that state legislators understand the severity of the problem, this is the year that we can create public policy that will expand health coverage to every single individual who needs it. Which of course, includes individuals with disabilities,” Angela Monson, Campaign Organizer with the Oklahoma Coverage Campaign told Oklahoma City’s channel 9 news.

South Dakota Gov. Kristi Noem said earlier this year that she is not in favor of Medicaid expansion. She said she would prefer a state initiative that “can be innovative in health care for our tribes.”

The success of Medicaid expansion in Montana and North Dakota could help pave the way in South Dakota, too. The populations are similar with an urban, rural mix. And all three states could benefit from more federal dollars being channeled into the Indian Health system. One recent study by Navigant, an international consulting firm, looked at the first two years of Montana’s Medicaid and found that the expansion led to an additional $2 billion in economic activity. Some 9,700 jobs were created paying nearly $800 million in wages. The expansion led to a huge drop in the uninsured rate, and added significant resources to the rural health network.

And the Indian health system in Montana? A report by the Montana Budget and Policy Center found that Medicaid expansion added $47 million to the Indian health system in the state and an increase in services. “Additionally, it has enabled IHS to move from a level 1, “life or limb” services prioritization for PRC funds, to a level 4. This means that American Indians are now able to access critical preventative care that can help reduce health disparities and improve health outcomes including life expectancy.”